BMW is about to celebrate the 50th anniversary of its high-performance M Division in 2022. What initially started as a subsidiary that facilitates the German brand's racing program turned out to be one of the world's most iconic names when it comes to producing great handling sports cars, such as the BMW M3.

Over its five generations, the M3 has evolved from being a pure motorsport-bred sports car to gaining creature comforts and becoming a powerful modern compact sports sedan that continues to deliver sheer driving pleasure. For many enthusiasts, however, they believe the pinnacle of the M3's potential came about in the third-generation M3, which is called the E46, which possessed modern amenities while remaining true to its roots as an analog driver's car.

10 Made From 2000 To 2006

The E46 M3 was first revealed in October 2000 at the Geneva Motor Show wearing a coupe body style. Together with the first-generation E30 M3, the car did not have a 4-door sedan layout that the current generation M3 follows.

Instead, the E46 M3 was offered with a 2-door convertible layout for open-top motoring in 2001. It went on sale until 2006 when it was replaced by the V8-powered E90 M3.

RELATED : Here's What We Love About The 2000 BMW M3 E46

9 Best-Selling M3

As mentioned, many enthusiasts believe the greatest balance of power, performance and everyday usability was perfected in the E46 M3, and that shows even in the number of units that BMW has produced.

To date, the E46 M3 remains the best-selling M3 ever made, as during its model run, a total of 85,766 examples were made, outselling its predecessor, the E36 M3, by over 14,000 units, and its successor, the E90 M3, by almost 20,000.

RELATED : 10 Reasons Why The E46 Is The Best BMW M3 Money Can Buy

8 'Ring Beast

Getting round the Nürburgring Nordschleife in under 8 minutes nowadays can be achieved by most hot hatches. But back in 2004, going under 8 minutes on the Green Hell is knocking on supercar territory, and that's what the E46 M3 managed to do.

The CSL version of the E46 M3 lapped the 'Ring in just 7 minutes and 50 seconds. For comparison purposes, that's 5 seconds faster than a Ferrari F430 that was made in the same era as the M3. That's proper quick.

RELATED : These Are The 10 Ultimate BMW M3 Versions

7 Carbon Fiber Roof

The E46 M3 was the first M3 to come with a carbon fiber roof as standard in the CSL model to save weight and lower the car's center of gravity.

Succeeding M3 models have followed this trend, adding further evidence that the E46 was indeed the bridge connecting the hardcore race-bred E30 to the current G80.

6 Performance Figures

The standard E46 M3 could go from a standstill to 62 mph in just 5.1 seconds, and has an electronically limited top speed of 155 mph. Compared to its predecessor, the E36 M3, the E46 accelerated almost a second faster to 62 mph.

Furthermore, the E46 M3 has some serious grip with the way it handled 0.89g on the skidpad, showing the expertly tuned chassis dynamics that made it an icon.

5 VANOS

BMW still uses an inline-6 in their latest M3 and M4 models. However, the E46 M3 is the last one that's naturally aspirated. The S54 engine found in the E46 M3 is the final evolution of BMW's S50 engine, which produced 338 hp and 269 lb-ft of torque in the standard M3. It utilized BMW's own variable valve timing system called the VANOS, and was the first M3 to use a drive-by-wire throttle.

Furthermore, the S54 had individual throttle bodies, and produced one of the sweetest sounding induction noises you could ever hear from an internal combustion engine.

4 SMG Transmission

Another step that the E46 M3 made towards the modern age was its usage of a sequential manual gearbox, or the SMG-II transmission in BMW terms.

Gearshifts can be selected via the shift lever or through the flappy paddles found behind the M3's steering wheel. At the time, it was praised for its quick shifts and great on-track performance, but it was rather problematic during daily use.

3 M3 CSL

BMW only applied the CSL badge twice in its rich history. First was with the homologation model, which was perhaps better known as the "Batmobile", while the second was with the special-edition E46 M3, which was only limited to 1,383 cars.

There was a lot of emphasis in making the E46 M3 as light as possible. There was no air conditioning, the rear windows were thinner, the boot floor was made out of fibre-board, and even sound deadening was removed to make the M3 CSL 243 lbs lighter than the standard M3. Furthermore, it had more power than a standard M3, as the S54 engine in the CSL produced 355 hp.

2 Competition Package

Towards the end of the E46 M3's model run, BMW decided to take some components from the CSL's parts bin and fitted them to a standard M3, giving birth to the Competition Package.

However, compared to the CSL which had the SMG-II transmission, the M3 CS had a six-speed manual. Furthermore, it didn't have the lightweight bits of the CSL, but had the stiffer springs, quicker steering ratio and the M-track mode which further loosened the M3's stability control.

1 M3 GTR

The E46 M3 might be the best-selling M3 to date, but the same model also had one of the most limited-production version in history with the M3 GTR — the first M3 to feature a V8 engine.

Only 10 road-going M3 GTR models were made to satisfy the requirements to race the 24 Hours of Le Mans, and each cost $330,000 back in 2001. The detuned P60 V8 engine had 380 hp and had the same dry-sump lubrication used by the M3 GTR race car, which was made popular by the video game Need For Speed.